So Much for Merkel Riding Off Into the Sunset

(Bloomberg) --

Angela Merkel is having one of those weeks.

Her plans to secure her legacy are unraveling. Her partnership with Emmanuel Macron is on the rocks. And when she heads to the U.S. today, she’s not even going to bother with a stop at the White House.

On Sunday, the German chancellor faces an awkward reunion with Annegret Kramp-Karrenbauer, the woman she picked to succeed her. AKK, as she’s known in Germany, has floundered since taking over as leader of Merkel’s Christian Democrats, with a series of gaffes culminating in the party’s worst-ever national election result in last week’s European parliamentary vote.

As Arne Delfs and Patrick Donahue report, Merkel has decided AKK is just not up to the job and is determined to stick around to see out her term through 2021.

Merkel is under pressure at home to secure one of the EU’s top jobs in the horse trading that began with yesterday’s post-election summit. But French President Macron arrived in Brussels with all guns blazing in a bid to take down her candidate for commission president, Manfred Weber.

So her trip to Harvard offers a moment of welcome relief, even if the chancellor’s advisers will be keeping an anxious eye on U.S. President Donald Trump’s Twitter feed.

Global Headlines

Near miss | The Trump administration again refrained from labeling China a currency manipulator, avoiding further escalation in the trade war between the world’s two largest economies. Nine countries were included on a watch list: five new additions — Ireland, Italy, Vietnam, Singapore and Malaysia — plus China, Japan, South Korea and Germany.

• Click here for more on how Beijing is gearing up to use its dominance of rare-earths supplies as a weapon in its trade battle with Washington.

Northern exposure | New Hampshire helped make Bernie Sanders a force to be reckoned with in Democratic presidential politics. But as his 2020 campaign rolls across the state, he’s facing fiercer competition and great expectations that could prove tough to fulfill. Anything short of a victory would be a serious blow to his second bid for the party’s nomination.

‘For the birds’ | The Conservative Party leadership contest is giving the U.K. Parliament a brief respite from debating Brexit, but the next constitutional showdown is already looming in the fall. After several pro-Brexit contenders to succeed Theresa May promised to leave the EU without a deal if necessary, House of Commons Speaker John Bercow indicated he’d ensure lawmakers have the tools to prevent crashing out. “The idea that the House won’t have its say is just for the birds,” he said.

Bolivar madness | Venezuela’s central bank published key economic data for the first time since 2015 that showed inflation skyrocketed to 130,060% in 2018 and the economy shrank 22.5% in the third quarter from a year earlier. As Patricia Laya reports, cash is so scarce under President Nicolas Maduro’s government that it’s almost useless, and getting a stack of 6,000 bolivars — the equivalent of a dollar — can take hours of canvassing ATMs and banks.

Palestinian bailout | Rich Palestinians are offering President Mahmoud Abbas’s cash-strapped government tens of millions of dollars in emergency loans after Israel announced it’s withholding about $11 million worth of tax revenues a month in a standoff over payments to Palestinians involved in attacks on its citizens. The dispute is threatening the finances of the West Bank administration and could spark a security vacuum following the worst round of violence since the 2014 war.

What to Watch

• Israeli Prime Minister Benjamin Netanyahu’s coalition-building crisis intensified hours before a midnight deadline, with parliament set to launch a debate on dissolving itself and calling new elections.
• Bloomberg Government takes a closer look at the lobbying push surrounding U.S. lawmakers’ efforts to regulate the cosmetics industry after asbestos was found in makeup kits.
• Days after a victory in the EU’s parliamentary election, Italy’s nationalist Deputy Prime Minister Matteo Salvini is gearing up for a new clash with his weakened ruling partner over a corruption case that is putting the survival of their coalition at risk.

And finally...A former imam of Mecca’s grand mosque says it’s time to break down a major taboo in Saudi Arabia. Gender segregation has reached the level of a “kind of phobia,” Adel Al-Kalbani said on a state-sponsored television channel this week, arguing that in the era of the Prophet Mohammad, men and women prayed together. His call reflects the increasingly permissive social atmosphere developing under the rule of 33-year-old Crown Prince Mohammad bin Salman.

--With assistance from Kathleen Hunter and Stuart Biggs.

To contact the editor responsible for this story: Michael Winfrey at mwinfrey@bloomberg.net, Karl Maier

©2019 Bloomberg L.P.